U.S. farmers hope Trump delivers on trade deal with Japan

American farmers have not only endured retaliatory tariffs from China and other nations, they've watched as most of their top foreign competitors used free trade agreements to make inroads into Japan, a historically protectionist market with nearly 127 million consumers.

Now they're wondering if the coming U.S.-Japan trade deal that President Donald Trump is showcasing will be as strong for farmers as the Trans-Pacific Partnership, which was negotiated under President Barack Obama and ditched by Trump as soon as he took office.

When Trump bailed on TPP, competitors such as Canada, Mexico and Australia forged ahead with a revamped version of the trade deal. Not wanting to be left out, the European Union reached its own free trade agreement with Japan. Both agreements went into effect at the beginning of this year.

The result: Top foreign competitors to American farmers get a pricing advantage after taking into account the 38.5% import tax that is applied to American beef, the 20% tariff applied to American ground pork and the 40% duty applied to some cheeses.

The changes have contributed to a new trade landscape that saw U.S. farm exports to Japan drop 2% to $6.5 billion in the first six months of this year compared with the same period last year, according to the Agriculture Department.

"We've taken a temporary step backward because our competitors have had better access than us," said Nick Giordano, a vice president at the National Pork Producers Council.

Giordano is hopeful that dynamic will change soon. The president, in need of some wins on the trade front, has said the U.S. and Japan have agreed in principle on a new trade pact that the two parties hope to make official later this month.

Trump announced the agreement a couple of days after he raised retaliatory tariffs on China and ordered American companies to consider alternatives to doing business there, moves that contributed to significant drops in the financial markets.

"We've agreed to every point, and now we're papering it and we'll be signing it at a formal ceremony," Trump said.

Trade talks involving the Trump administration tend to be subject to fits and starts. Farm groups are hoping for no setbacks.

"Japan is very important to us," Giordano said, calling it pork producers' largest-value market year in and year out. He added: "We're losing sales to our EU and TPP competitors. So we're just really real eager to get back to a level playing field there and this deal is going to do it."

For all of Trump's criticism of Obama's TPP, it's unclear whether Trump will be able to secure better terms than the ones farmers would have gained under Obama. The American Farm Bureau Federation had projected that TPP would have increased net farm income by $4.4 billion annually.

Japanese officials are optimistic the two sides can reach a deal in time for the U.N. General Assembly later this month in New York. They are hoping for an agreement that gives Japan relief from the import taxes Trump slapped last year on foreign steel and aluminum and from the tariffs he's threatened to impose on auto imports. In return, American farmers would get the kind of increased access to the Japanese market they would have received under TPP.

U.S. beef has continued to enjoy strong sales in Japan this year. Kent Bacus of the National Cattlemen's Beef Association said a drought in Australia is limiting that nation's ability to export more beef. Still, he said the tariff paid for Australian beef, now at 26.6% versus 38.5% for U.S. beef, is going to encourage Japanese importers to look at other sources, including Canada, New Zealand and Mexico.

"Essentially, we're living on borrowed time," Bacus said.

Groups representing wheat and dairy farmers offered similar assessments that they too could soon expect to lose market share if the U.S. doesn't get the same terms from Japan as do top foreign competitors. They're hoping that once an agreement with the Japanese is signed, it will go into effect without the need for congressional approval. They don't want to wait months, if not years, for a congressional vote.

"We really get our bell rung if we have to wait and compete at a disadvantage for the next couple years in the Japanese market," Giordano said.

Sep. 6
06:43 am JST

The changes have contributed to a new trade landscape that saw U.S. farm exports to Japan drop 2% to $6.5 billion in the first six months of this year compared with the same period last year, according to the Agriculture Department.

Do both the government and producers expect that this number is going to rise every single year?

They are making an incredible amount of money, and while there is an imbalance, it's not like they are loosing any either!

Sep. 6
07:11 am JST

Trade talks involving the Trump administration tend to be subject to fits and starts.

To be expected. Trump's in way over his head on all issues, domestic and international. And he's too busy to get involved with his job (fortunately?) because he's playing golf on the taxpayers' dimes and using his influence to get US taxpayers to pay for filling rooms at his hotels and resorts. Plus there are celebrities to tweet.

For all of Trump's criticism of Obama's TPP, it's unclear whether Trump will be able to secure better terms than the ones farmers would have gained under Obama.

A key to Trump's policies: if President Obama did something, destroy it. Then do what Obama did, change its name and take credit.

"We really get our bell rung if we have to wait and compete at a disadvantage for the next couple years in the Japanese market,"

If they pay enough to Trump and his GOP ilk's campaigns, if they're corporate owned, and if they're parts of key voting blocs, expect Trump etal to increase their subsidies, which would be one more example of socialism for the rich

Sep. 6
07:24 am JST

Sep. 6
07:29 am JST

Japan's market could never replace China's, the farmers should know this. It's about time that trump supporters saw this guy for what he is, a con. He was never a successful businessman, in fact by all accounts he was known as a clown in NY business circles. "Everything Trump Touches, Dies." The trade deal is not a done thing, it will take time, but donnie will do everything he can just to show something before the election and in his impatience could blow it right out of the water. Of course, having said that, lap dog abe could give his master a deal and let the Japanese market and consumers suffer since he's not going to run in the election anymore.

Sep. 6
09:28 am JST

@bas4fleasing out properties in his Trump Tower an uptick plus.

If Trump would release his most current tax info, the American public - excluding the minority that still backs him - would like to see how much Trump's properties have profited from his time in office and how much of their tax money is being used to subsidize them. More socialism for the rich - assuming Trump is rich and not in the owe to 'foreign' investors.

Sep. 6
09:31 am JST

What is really happening, all these trade deals and related reduction in tariffs has not translated to cheaper products or greater availability of products. I am beginning to think all the savings from the reduced tariffs are not passed to consumers but helping companies increase profits.

The government needs to have some control over pricing if not importers will continue to take us consumers to the cleaners.

Sep. 6
12:44 pm JST

American farmers are screwed if they think Trump will deliver in any meaningful way with Japan. When, when, in the last 50 years, or even more, have you ever seen Japan actually give any ground to foreign countries regarding food and agriculture? Especially it threatens current domestic agriculture.

Sep. 6
01:06 pm JST

Trump's already negotiated better trade deals with Canada and Mexico, the one with Japan will be formalized soon.

and yet Japan's chief negotiator has clearly stated that the US wont be getting any better deal than what the current TPP members have. Being disadvantaged by not being in the TPP has lost many US farmers market share to their foreign rivals. So it makes you wonder why you'd leave the TPP in the first place. Losing market share and having to play catch up isnt a decision a master negotiator would ever contemplate

Sep. 6
01:31 pm JST

Republicans like bailouts and think it solves everyone's problems. They only think in the short-term. Farmers on the other hand, know that bailouts are only a band-aid and doesn't solve their problems long-term. They've already lost markets and had bridges burned due to Trump's trade war. Trump doesn't like diplomacy because it takes too much time and effort. He just likes to go for the quick fix, and doesn't mind if it hurts the poor and middle-class.

Sep. 6
01:52 pm JST

Sep. 6
02:41 pm JST

“and yet Japan's chief negotiator has clearly stated that the US wont be getting any better deal than what the current TPP members have.”

What do you expect him to say? Admitting that Japan has caved in to American arm twisting and delivered a superior deal to what Japan had already signed off on with TPP countries will only encourage those countries to believe that they could and should have held out for more. Hopefully, foreign governments which signed off on the TPP deal, anticipated and made provision for this sort of eventuality and that any subsequent deals offering conditions superior to those already negotiated will be extended to all. Privately, the Japanese must be cursing the Americans for threatening to spoil their done deal with the rest of the TPP members. In their trust nobody fashion, it may also have occurred to them that they’ve been outsmarted.

Sep. 6
04:01 pm JST

Sep. 6
09:41 pm JST

For all of Trump's criticism of Obama's TPP, it's unclear whether Trump will be able to secure better terms than the ones farmers would have gained under Obama. The American Farm Bureau Federation had projected that TPP would have increased net farm income by $4.4 billion annually.

Trump doesn’t know what he’s doing. We can agree on that. This isn’t about conservatives and liberals. It doesn’t matter what your views are, competency is s must.

Sep. 7
12:55 am JST

Privately, the Japanese must be cursing the Americans for threatening to spoil their done deal with the rest of the TPP members.

why it wont be a secret what deal Japan gave to America and if there is lower tariffs the other 11 TPP member countries will demand the same .Japan certainly wouldnt threaten the newly formed TPP which they took a leading role in by disadvantaging these same countries that signed up for it. Why do you think they wanted the TPP finalized so quickly. So America would feel disadvantaged by the these trade rivals and want a speedy FTA with Japan. Got to hand it to Japan they played Trump well in this regard.

Sep. 7
11:06 am JST

Wtfjapan: “.....if there is lower tariffs the other 11 TPP member countries will demand the same. Japan certainly wouldnt threaten the newly formed TPP which they took a leading role in by disadvantaging these same countries that signed up for it.”

A curiously logic bereft attempt at refuting what I said by simply repeating it in your own words; failing to realise that the concluding sentence is totally contradicted by those words.